Correlation Between Shengtak New and Western Metal

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Shengtak New and Western Metal at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Shengtak New and Western Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shengtak New Material and Western Metal Materials, you can compare the effects of market volatilities on Shengtak New and Western Metal and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Shengtak New with a short position of Western Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shengtak New and Western Metal.

Diversification Opportunities for Shengtak New and Western Metal

ShengtakWesternDiversified AwayShengtakWesternDiversified Away100%
-0.37
  Correlation Coefficient

Very good diversification

The 3 months correlation between Shengtak and Western is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Shengtak New Material and Western Metal Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Metal Materials and Shengtak New is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Shengtak New Material are associated (or correlated) with Western Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Metal Materials has no effect on the direction of Shengtak New i.e., Shengtak New and Western Metal go up and down completely randomly.

Pair Corralation between Shengtak New and Western Metal

Assuming the 90 days trading horizon Shengtak New is expected to generate 1.14 times less return on investment than Western Metal. In addition to that, Shengtak New is 1.37 times more volatile than Western Metal Materials. It trades about 0.01 of its total potential returns per unit of risk. Western Metal Materials is currently generating about 0.02 per unit of volatility. If you would invest  1,624  in Western Metal Materials on November 17, 2024 and sell it today you would earn a total of  153.00  from holding Western Metal Materials or generate 9.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Shengtak New Material  vs.  Western Metal Materials

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025 -15-10-505
JavaScript chart by amCharts 3.21.15300881 002149
       Timeline  
Shengtak New Material 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Shengtak New Material has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shengtak New is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb293031323334353637
Western Metal Materials 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Western Metal Materials are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Western Metal sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb15.51616.51717.51818.51919.5

Shengtak New and Western Metal Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.0-3.0-1.99-0.990.01540.921.852.773.7 0.0400.0450.0500.0550.0600.0650.070
JavaScript chart by amCharts 3.21.15300881 002149
       Returns  

Pair Trading with Shengtak New and Western Metal

The main advantage of trading using opposite Shengtak New and Western Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shengtak New position performs unexpectedly, Western Metal can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Western Metal will offset losses from the drop in Western Metal's long position.
The idea behind Shengtak New Material and Western Metal Materials pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

Other Complementary Tools

Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets